As the legal battle between Proview and Apple over the iPad trademark in China continues, one creditor has become unwilling to wait for a settlement and has applied to have the ailing monitor maker declared bankrupt.

The Associated Press reports that Fubon Insurance, which is owed $8.68 million by Proview, is seeking to have the company liquidated. A Chinese official, who identified himself only by his surname, in Shenzhen said an announcement about the bankruptcy will come soon.

"It's a sensitive case in a sensitive period of time, so we won't comment or release information while we will have an announcement in the near future," he said.

Ma Dongxiao, a lawyer for Proview, assured that any financial problems the company is experiencing would not affect the ongoing trademark case. Apple is currently appealing a lower court decision that ruled in favor of Proview.

According to reports out of mainland China, Proview had requested that Fubon wait until it had resolved its complaint against Apple, but Fubon rejected the request. A lawyer for the insurance company reportedly said that her client was not convinced that any compensation payments from Apple would be enough for Proview to pay back its debts, which are said to be barely covered by its current assets.

Recent profiles of Proview have characterized it as being on its death bed. The company, which is at risk of being delisted from the Hong Kong Stock Exchange, formerly made computer monitors, but its main business now comes from LED street lights. Owner Yang Long-san has said that a win against Apple would help him rebuild the company and "overtake" its competitors.

Proview has been vocal about its interest in negotiating a settlement with Apple, but, as of last week, the two companies had yet to initiate formal negotiations. Apple continues to insist that it is the rightful owner of the Chinese iPad trademark through a deal that took place in 2009.

Apple has threatened Proview with a defamation countersuit over allegations that the company has made false or misleading public statements about the trademark suit. Proview has responded by accusing Apple of fraud and unfair competition because the iPad maker used an intermediary to negotiate the deal for the trademark.

According to reports out of mainland China, Proview had requested that Fubon wait until it had resolved its complaint against Apple, but Fubon rejected the request. A lawyer for the insurance company reportedly said that her client wanted some of the remaining funds before Proview's lawyers got the last of it.

"Solipsism has said that a win against Apple by Proview would be an indication to procure sturdy umbrellas that can withstand the force of excrement from flying pigs."

Quote:

Originally Posted by Macky the Macky

If Fubar Insurance had any shred of confidence that Proview would prevail against Apple it would have not pushed for bankruptcy. This action is telling in itself.

Apple would never pay $2 billion to make this go away, and for Proview, anything less than $2 billion won't save the company.

Quote:

Originally Posted by Dunks

Well at least it's now clear what the motivation behind the trademark dispute was.

Ironically, I thought Proview was already bankrupt? Which is what a lot of people were arguing, that since Proview is bankrupt the creditors are the owners of the China iPad trademarks.

A few users made very lengthy arguments that the creditors own the trademarks. But how can they? Unless it has been transferred to them, or the company becomes officially bankrupt and hence then goes into "administration" whereby the administrator then divies up the loot to creditors.

Moreover, that argument was used as such... Proview sold China Trademarks to Apple, but document still says Proview. So, Apple doesn't own it. Then they argued that creditors now own Proview (in some way?), so creditors own China Trademarks. But on the document it still says Proview. So, what's going on? How can Apple not own it and the ceditors do when the original document still shows it has not been transferred out of Proview? What ownership do the creditors have over Proview if Proview is not officially bankrupt? Did Mr. Yang borrow several mil from some guy in a suit sitting in a warehouse that now wants his money back?

Don't forget there is still no news of what motivated the confiscations of the iPads in China ~ was it a local directive, state, national, court order (which court?) which authorised the confiscations? Or just "officials" doing whatever they wanted.

Without going into my usual rant (that has been channeled to http://forums.appleinsider.com/showthread.php?t=143990), mark my words, this is precisely the kind of fungal infection of decent, hard-working people in Asia. Why they spend their entire life savings to move to Australia to make the pizza I had for lunch ~ on a lighter note, reminded me of that "mom and pop" episode in Seinfeld ~ were they really a mom and pop?.

Ironically, I thought Proview was already bankrupt? Which is what a lot of people were arguing, that since Proview is bankrupt the creditors are the owners of the China iPad trademarks.

There has been some inaccurate comments, but while Proview has no income to speak of and $2 billion of debts, bankruptcy was where this train wreck was headed.

It only takes one creditor to demand that Proview declare bankruptcy, and Fubar Insurance just did that.

The lawyers are likely working on a percentage of whatever settlement they can force out of Apple, so for the lawyers it's something or nothing. That's why they have been signaling for a settlement, any settlement. But for Yang Long-san, who is personally signed for almost a billion of the company debt, he wants to wring $2 billion out of Apple and that's not going to happen. He needed to do this before one of the creditors forced bankruptcy. He was rolling the dice for all or nothing and crapped out.

"That (the) world is moving so quickly that iOS is already amongst the older mobile operating systems in active development today." — The Verge

As I suggested earlier, I see the invisible hand of the Chinese government moving the pieces about to make sure that thousands of Chinese workers are not idled even as the Chinese economy already shows signs of cooling off.

With an opaque judicial system and lots of political pressure, look for rulings to steadily pile up against Proview as the creditors pick the bones of its carcass. Yang just refuses to acknowledge that Proview is dead.

As I suggested earlier, I see the invisible hand of the Chinese government moving the pieces about to make sure that thousands of Chinese workers are not idled even as the Chinese economy already shows signs of cooling off.

With an opaque judicial system and lots of political pressure, look for rulings to steadily pile up against Proview as the creditors pick the bones of its carcass. Yang just refuses to acknowledge that Proview is dead.

i am not following you. the picture in the article said proview closed and building is empty and deserted. do you see any idling chinese workers in the building? a closed factory is the sign that chinese economy is cooling off?

by opaque, do you mean that chinese court is a black box system? can you provide any specific "opaque" issue you saw in chinese judicial system? have you been through any chinese courts? lower, intermediate, or high court?

i am not following you. the picture in the article said proview closed and building is empty and deserted. do you see any idling chinese workers in the building? a closed factory is the sign that chinese economy is cooling off?

by opaque, do you mean that chinese court is a black box system? can you provide any specific "opaque" issue you saw in chinese judicial system? have you been through any chinese courts? lower, intermediate, or high court?

please provide some concrete data to support your points.

I had commented in another thread the other day that this will boil down to a politcal decision (just my hypothesis).

The idled Chinese workers would be those who would otherwise be working on the iPad assembly lines and for their suppliers.

No I haven't been through the Chinese court system but much has been written about the opaqeness of their system. You need a system like that to convict political prisoners because they dare write something unflattering about the Communist leadership on an internet site.

Ironically, I thought Proview was already bankrupt? Which is what a lot of people were arguing, that since Proview is bankrupt the creditors are the owners of the China iPad trademarks.

Proview's future is already in the hands of the bankruptcy court. They can not spend money or dispose of assets without court approval. There is not yet a final decision on disposal of the assets or restructuring to allow them to emerge from bankruptcy.

"I'm way over my head when it comes to technical issues like this"Gatorguy 5/31/13

this person wants to force Insolvency so that, they can then turn around and say that apple bought the trademark at a under-value so that Trustee in backruptcy can take it back and resell it for it's market value... (Insolvency Act... 5 or 2 year rule for undervalue/gifts; assuming that the china Insolvency Act is similar to usa's and canada's)

Apple is fighting hard to prove that it was a good faith sale (at a fair market rate), so that the trustee won't take it back and resell it. (and proview is saying that a division sold it, and they made a mistake, thus sold it undervalued).
nice tactic, but I believe it was a good faith sale, and wasn't unvalued at the time...

i am not following you. the picture in the article said proview closed and building is empty and deserted. do you see any idling chinese workers in the building? a closed factory is the sign that chinese economy is cooling off?

by opaque, do you mean that chinese court is a black box system? can you provide any specific "opaque" issue you saw in chinese judicial system? have you been through any chinese courts? lower, intermediate, or high court?

please provide some concrete data to support your points.

I think the poster was intimating that if this case was lost then there would be a lot of Foxconn employees standing idle rather than Proview workers.

I personally do not think this is a political move on behalf of the Party or the Government (usually the same thing but not always. Fubon is a privately held company based in Taiwan not mainland china (unlike most of the creditors which are banks and Chinese state owned banks at that). I am guessing that Fubon's debt is high enough up the pecking order that they still stand a chance of recovering most if not all the outstanding amount as long as the company does spend anymore on legal fees. They probably allowed Proview to see what they could win over a certain period or a limited expenditure but have hit the escape button now.

As to Chinese courts being opaque yes there are a reasonable number of well documented cases where the judgement has been inexplicable given the stated law and the supporting evidence. This is why my advice (both received and given) is that you rely on the courts as a measure of last resort. If you can find a way to make a settlement beforehand then you are almost always better to take it unless you are very sure of your hand (and that doesn't mean you have to be legally in the right).

It is just that the rules are sometimes different here and they can change awfully quickly

this person wants to force Insolvency so that, they can then turn around and say that apple bought the trademark at a under-value so that Trustee in backruptcy can take it back and resell it for it's market value... (Insolvency Act... 5 or 2 year rule for undervalue/gifts; assuming that the china Insolvency Act is similar to usa's and canada's) - It's not!

Apple is fighting hard to prove that it was a good faith sale (at a fair market rate), so that the trustee won't take it back and resell it. (and proview is saying that a division sold it, and they made a mistake, thus sold it undervalued).
nice tactic, but I believe it was a good faith sale, and wasn't unvalued at the time...

- In your book it was a good faith sale and in my book too but that doesn't mean it is in the Little Red Book believe me.\

Ironically, I thought Proview was already bankrupt? Which is what a lot of people were arguing, that since Proview is bankrupt the creditors are the owners of the China iPad trademarks.

A few users made very lengthy arguments that the creditors own the trademarks. But how can they? Unless it has been transferred to them, or the company becomes officially bankrupt and hence then goes into "administration" whereby the administrator then divies up the loot to creditors.

Moreover, that argument was used as such... Proview sold China Trademarks to Apple, but document still says Proview. So, Apple doesn't own it. Then they argued that creditors now own Proview (in some way?), so creditors own China Trademarks. But on the document it still says Proview. So, what's going on? How can Apple not own it and the ceditors do when the original document still shows it has not been transferred out of Proview? What ownership do the creditors have over Proview if Proview is not officially bankrupt? Did Mr. Yang borrow several mil from some guy in a suit sitting in a warehouse that now wants his money back?

IIRC, the Hong Kong company is bankrupt. It is the eSchenzen company which owns the trademark in China.

Jrag is the one who says that Apple cannot have purchased the trademark because of the creditor control. But he has been confused about the identities of the three companies.

this person wants to force Insolvency so that, they can then turn around and say that apple bought the trademark at a under-value so that Trustee in backruptcy can take it back and resell it for it's market value... (Insolvency Act... 5 or 2 year rule for undervalue/gifts; assuming that the china Insolvency Act is similar to usa's and canada's)

The sales contract was signed by the Taiwan company, who did not own the Chinese trademark. The Chinese company is the owner, and is the subject of this story.

The sales contract was signed by the Taiwan company, who did not own the Chinese trademark. The Chinese company is the owner, and is the subject of this story.

I haven't seen anymore paperwork than you probably have but my understanding differs slightly.

The Taiwan company said they had the authority to agree the sale of that trademark to Apple's proxy company and that that the transfer would be made.
This agreement was made on behalf (and signed by a company director and shareholder) of the Taiwan Company.
But they didn't own you say and you are correct and it seems Apple's legal representatives were aware of this and therefore asked for the confirmation of authority. You are right they didn't own it but said director was also a shareholder, creditor and debtor as well as a main board director of the Shenzen company and so could have had authority to transfer the ownership.

The long and short of it is that even if Proview win this case there is the small matter of financial fraud to be heard at a later date should either Apple wish to proceed with it (and why wouldn't they) and conviction for Financial fraud can still carry the death penalty over here. Especially if the case is seen to be high profile and this now is.

This is bigger new in China than it is in most parts of the world and I can find a news channel or commentary programme referring to it everyday of the week.

This is a serious sh*t or bust strategy forced on Proview which could have disastrous consequences either way.

But they didn't own you say and you are correct and it seems Apple's legal representatives were aware of this and therefore asked for the confirmation of authority. You are right they didn't own it but said director was also a shareholder, creditor and debtor as well as a main board director of the Shenzen company and so could have had authority to transfer the ownership.

The long and short of it is that even if Proview win this case there is the small matter of financial fraud to be heard at a later date should either Apple wish to proceed with it (and why wouldn't they) and conviction for Financial fraud can still carry the death penalty over here. Especially if the case is seen to be high profile and this now is.

The Taiwan company is clearly liable for misrepresenting that they owned the Chinese trademark.

While the director to the Schenzen company could have the authority to tranasfer property of the Schenzen company, I have seen no documents signed on behalf of the Schenzen company in which the Schenzen company has done so.

There are emails. I have seen no contract of sale.

Apple can argue fraud or mistake. But to argue that the Chines company sold the trademark is a big stretch. They never signed the sales contract.

this person wants to force Insolvency so that, they can then turn around and say that apple bought the trademark at a under-value so that Trustee in backruptcy can take it back and resell it for it's market value... (Insolvency Act... 5 or 2 year rule for undervalue/gifts; assuming that the china Insolvency Act is similar to usa's and canada's)

Apple is fighting hard to prove that it was a good faith sale (at a fair market rate), so that the trustee won't take it back and resell it. (and proview is saying that a division sold it, and they made a mistake, thus sold it undervalued).
nice tactic, but I believe it was a good faith sale, and wasn't unvalued at the time...

That's the missing piece of the puzzle. The fact that Proview apparently had an order in place forbidding them to sell assets makes it much more plausible for the creditors to win that.

It's going to be interesting.

"I'm way over my head when it comes to technical issues like this"Gatorguy 5/31/13

The Taiwan company is clearly liable for misrepresenting that they owned the Chinese trademark.

While the director to the Schenzen company could have the authority to tranasfer property of the Schenzen company, I have seen no documents signed on behalf of the Schenzen company in which the Schenzen company has done so.

There are emails. I have seen no contract of sale.

Apple can argue fraud or mistake. But to argue that the Chines company sold the trademark is a big stretch. They never signed the sales contract.

How big a stretch? Proview Shenzhen was a wholly owned subsidiary of Proview group at the time. Three employees of Proview Shenzhen were involved in the trademark negotiations.
The negotiations were led by Rowel Yang, chairman of Shenzhen Proview.
The contract was signed by Rai Mai, head of the legal department of Proview China.

Proview Shenzhen have argued that they had no knowledge of the trademark negotiations depute their Chairman, another oard director and the head of their legal department have all been involved at every stage of the negotiations and transaction.
They are now arguing that some/all of these individuals were acting only for Proview Taiwan. edit - Despite confirming that they had the right to transfer ownership of the Chinese trademark
This is all i the public domain - I am not privy to this information because I am special, just that I can read.

How long do you intend to take this stance just for the sake of your "slappiness"

The sales contract was signed by the Taiwan company, who did not own the Chinese trademark. The Chinese company is the owner, and is the subject of this story.

Proview started in Taiwan. Taiwanese law forbids ownership of Chinese company (at the time), so Proview started a holding company in Hong Kong, did the paper work so it owns companies in Taiwan and China.

Like other similar companies, Proview has its headquarter in Taiwan but the paperwork says otherwise. The management team for the Chinese and Taiwanese companies are the same group of people.

The contract was signed by Rai Mai, head of the legal department of Proview China.

corporations act through human beings, but the humans can have different capacities. The contract was signed by the Taiwan company. The mere fact that the man also had the cpacity to act for the Chinese company does not mean that the Chinese company was bound by the acts of the Taiwan company.

corporations act through human beings, but the humans can have different capacities. The contract was signed by the Taiwan company. The mere fact that the man also had the cpacity to act for the Chinese company does not mean that the Chinese company was bound by the acts of the Taiwan company.

Quite right, but Rai Mai was not an employee of Proview Taiwan at the time and as the Patent for China was held by the Shenzhen company which both parties had previously acknowledged they had shown by their actions that they were acting in both capacities or committing fraud by pretending to have authority that they had not given themselves as legal representatives of Proview Shenzhen! They can not have it both ways.

They either did have authority or always intended to defraud the purchaser, as I have said they probably don't want to win this case as the next could be much worse for their health (whether you agree with the way the law is carried out in this country)

My guess (and it is a guess) is that if BOC weren't a major creditor, this case would have been done and dusted by now.

Proview started in Taiwan. Taiwanese law forbids ownership of Chinese company (at the time), so Proview started a holding company in Hong Kong, did the paper work so it owns companies in Taiwan and China.

Like other similar companies, Proview has its headquarter in Taiwan but the paperwork says otherwise. The management team for the Chinese and Taiwanese companies are the same group of people.

I am pretty up to speed on this, being a foreign national with a Chinese wife, we operate a different but not dissimilar structure with cross shareholdings in a number of companies in China, HK and the UK to legitimately and legally get around having a foreign investment company or joint venture in China which is cumbersome, expensive and leave an organisation politically exposed in all the wrong ways in any dispute!

Apple (through a proxy) bought a trademark from a company that were no longer using that trademark. They sold it as they were in deep financial trouble and under pressure from their creditors to find and capitalise non-producing assets to repay debts which had built up over a number of years from over-expansion on thin to negative profits. This was a free bit of bunce at the time.

They negotiated a price that they were satisfied with at the time and this and a number of other sales convinced their creditors to extend their credit arrangements to allow them to move into a new business - LED street lamps!

To my knowledge neither IPADL nor Apple are in competing businesses nor were they in 2009.

A fee was agreed, the terms were agreed and a contract was drawn up, the name of the selling company was changed between draft and signature but the parties involved did not divest their legal interests (again to my knowledge but if they did it hasn't come out in court yet!)

Proview isn't going to lose because they are greedy, they are going to lose because they sold the trademark, and are now saying they didn't. It's bs plain and simple.

The problem is that it's not that simple. It may be true that Proview doesn't have a chance, but Apple's real competitors here are the banks.

The bank's real argument is that Proview did not have the legal right to sell the license because they had a court restriction in place. If that is true and they can prove it, the bank may be able to get the deal reversed.

"I'm way over my head when it comes to technical issues like this"Gatorguy 5/31/13

The problem is that it's not that simple. It may be true that Proview doesn't have a chance, but Apple's real competitors here are the banks.

The bank's real argument is that Proview did not have the legal right to sell the license because they had a court restriction in place. If that is true and they can prove it, the bank may be able to get the deal reversed.

I agree with you, the problem is not that simple and the financial institutions who are either creditors, or responsible for the reorganisation (or both in some cases) are making a call that this is the only way out of a hole.

But most financial institutions try and make pragmatic decisions based on their understanding of risk (not saying they get it right every time as we have seen over the last 5 years). Chinese banks are considerably more pragmatic that most Western Banks.

If they think there is a chance of winning and the additional cost to that already spent, they will continue with this case. It seems that at least one of the creditors has re-evaluated their risk and decided it may be time to call it a day.

The rest of the financial group then have to make a decision, either they let it fold and fight the case with Apple after taking ownership of the companies assets - most likely

Pay off Fugon to exit while remaining free from bankruptcy - possible but not in anyones interests except Fugon.

Re-capitalise Proview and try and make it a going concern - not going to happen, debt burden too high and probably throwing good money after bad.

The rhetoric from Proview is all about trying to keep the financial lifeline attached not what they neccesarily what they believe.

Still it makes interesting viewing and well worth buying more popcorn for the next instalment

this person wants to force Insolvency so that, they can then turn around and say that apple bought the trademark at a under-value so that Trustee in backruptcy can take it back and resell it for it's market value... (Insolvency Act... 5 or 2 year rule for undervalue/gifts; assuming that the china Insolvency Act is similar to usa's and canada's)

Apple is fighting hard to prove that it was a good faith sale (at a fair market rate), so that the trustee won't take it back and resell it. (and proview is saying that a division sold it, and they made a mistake, thus sold it undervalued).
nice tactic, but I believe it was a good faith sale, and wasn't unvalued at the time...

That may also why Apple is arguing that the trademark was abandoned. But at the end of the day the value of the mark is only what apple would pay for it. If they offered 60k then that is the market value. If they would have paid more is irrelevant as it does not appear to have been sought by other parties. The value of the mark now to anyone other than apple at this point is zero. It would be encumbered with too many liabilities to have a market. the value of the name to apple is based on the success of apple's products, technology and marketing which have enriched the mark's value after the purchase and those things were not bought from Proview. One could easily argue that the name is worth nothing as Proview possessed it for nearly a decade and only managed go out of business leaving billions of debt.